Since February 13, the domestic public health incident has ushered in a phased transition. Some provinces have gradually adjusted the first-level response to public health emergencies to the second-level response. At the same time, the national work focus has gradually shifted from “complete prevention and control” to “complete prevention and control”. Under the slogan of “promoting the resumption of work and production in an orderly manner”, the resumption of work and production in various places has been accelerated and steadily advanced. The downstream cotton spinning industry is gradually “warming up”, and the cotton market has finally seen the dawn of demand.
When Premier Li Keqiang chaired an executive meeting of the State Council on February 11, he emphasized the need to promote the resumption of work and production in a classified and orderly manner; when Premier Li Keqiang chaired a leading group meeting on February 17, he emphasized the need to coordinate epidemic prevention in accordance with the In line with the requirements of controlling and economic and social development, we will continue to strengthen precise prevention and control and promote the orderly resumption of work and production; on February 24, Premier Li Keqiang stated at the leading group meeting that we must solidly promote the orderly resumption of work and production, restore normal production and living order, and strive to achieve Economic and social development goals and tasks throughout the year. With the country’s targeted relaxation of “closed prevention and control” measures, domestic companies across the country have accelerated their resumption of work and production.
Take spinning enterprises as an example. As of the close of trading on February 25, according to samples from 14 cities in major production areas monitored by Longzhong, the comprehensive operating rate of spinning in the country was 35%; among them, the resumption rate in Jiangsu It is relatively good, reaching 50%. Secondly, Fujian and Shandong regions are 37% and 34% respectively; Hebei, Henan, and Zhejiang regions have lower than average operating rates (see table below). This is in stark contrast to the single-digit levels of spinning starts two weeks ago.
Since the outbreak of the public health incident, domestic ginning plants have delayed their resumption of work Production has resumed. As the national public health incident has been effectively controlled and the spread has improved, many provinces in the mainland have gradually relaxed the time points for companies to resume work and production. For example, some cotton ginning plants in the main producing areas of Shandong and Hebei have already resumed production in the week of the 21st. Obtain permission to resume work. Overall, the resumption of work and production of cotton ginneries in mainland China will be significantly ahead of that of Xinjiang cotton ginneries. As of this week, controls in Xinjiang have gradually been relaxed. A few ginneries have begun to resume work. Some ginneries are making preparations for resumption of work. Ginning plants that have no processing and sales needs will basically continue to be shut down. Unless there are special circumstances, It is expected that most ginning factories in Xinjiang may complete resumption of work in early March.
As the largest cotton-producing province in the country, Xinjiang is currently entering a critical period of spring plowing and sowing. The government is actively deploying public health incident prevention and control and spring plowing preparations in accordance with the “two-pronged and correct” approach to ensure that cotton, including cotton, Agricultural Production. On February 25, the Department of Industry and Information Technology of the Xinjiang Uygur Autonomous Region, together with the Autonomous Region Department of Finance, the Taxation Bureau and other relevant departments, studied and formulated a plan involving fiscal and financial support, rent reduction and exemption, tax reduction and exemption and deferment, social security support, account settlement, service guarantee, etc. The content of the “Sixteen Measures” will be implemented to promote the resumption of work and production of small, medium and micro enterprises in an orderly manner. In addition, in response to national guidance and requirements for enterprises to resume work and production, agricultural-related enterprises that have the conditions for resumption of work and production and are closely related to spring plowing and sowing will be included in key enterprises for resumption of work and production.
However, as upstream and downstream cotton companies resume work and production, will cotton prices usher in a “spring”? the answer is negative.
First of all, the resumption of work and production by enterprises is the general trend and a need to ensure the normal and smooth operation of the economy and society. Special periods require special treatment. Although the public health event risk window period has not yet passed, companies must bear certain risks when they resume work and production, but for the vast majority of companies, the shutdown will cause greater losses and risks to the company;
Secondly, the cotton spinning industry is a labor-intensive industry. Restricted by objective conditions such as difficulties in returning employees to the factory, limited truck transportation, and strict conditions for resumption of work, the short-term increase in the scale of resumption of work and production of enterprises in the upstream and downstream industries of cotton will be limited, or it may be difficult to achieve It is at normal levels, so it may be difficult to expect a short-term demand explosion. It is reported that companies applying to resume work in Xinjiang must meet four conditions: employees live together in the company or in hotels and implement closed management; personnel are picked up and dropped off at designated points; employees are from Xinjiang; and epidemic prevention is done for personnel and gathering places, and local management is carried out After the institution implements the acceptance inspection and approval, it will organize the resumption of production and work in an orderly manner.
Finally, the gradual warming of the market does not mean the dissipation of risks. As of now, the public health incident has not ended and the subsequent impact is more known, especially now that the public health incident is spreading rapidly outside China. Market concerns continue to exist, and unless sudden news or events occur again, it will be difficult for cotton to usher in an explosive “recovery market.” </p
